SK Hynix's HBM4 Crown Faces Its Sternest Test as Rivals Close the Gap
Published on 08/10/2026 at 14:12 | Redaktion boerse-global.de
A curious thing happened when SK Hynix delivered the strongest quarterly results in its history: investors sold the stock. The memory chip maker posted second-quarter revenue of 79.32 trillion won on July 29, up 257 percent year over year, alongside operating profit of 60.54 trillion won — a 557 percent surge that pushed the operating margin to a record 76 percent. Yet the shares shed roughly nine percent immediately after the release, as revenue narrowly missed consensus estimates despite the historic profit figures.
That disconnect has only widened in the weeks since. The stock has now surrendered 34.86 percent over the past 30 days, including a 9.38 percent slide last week alone, and trades at 1,420,000 won — some 52.46 percent below its late-June 52-week high. The sell-off has been so violent that the annualized 30-day volatility now stands at 145.78 percent, with the relative strength index at a weak 39.0.
A $38 Billion Bet Meets a Skeptical Market
The immediate trigger for the latest leg lower came from the company's own boardroom. On August 7, SK Hynix's directors approved a 54.3 trillion won investment package — roughly $38.3 billion — to build two new fabrication plants. The Yongin Y2 facility, dedicated to HBM and DRAM production, will absorb 35.2 trillion won with construction slated to begin in July 2027 and its first clean room due for June 2029. A further 19.1 trillion won will fund the Cheongju M17 NAND fab, with a February 2027 groundbreaking and clean room completion targeted for December 2028. Market researcher Omdia projects the expansion will support annual DRAM and NAND growth of around 19 percent through 2030.
Investors initially balked at the scale of the capital commitment. Management has attempted to steady nerves by signaling additional shareholder returns for the third quarter, though reports of a roughly 1 trillion won buyback program expected by the end of August remain unconfirmed. The company is also exploring strategic options for its packaging and testing facility in Chongqing, China, including a possible partial stake sale that could value the plant at around $3 billion — a move that raises questions about whether SK Hynix needs extra capital to fund its expansion ambitions.
The Yield Question That Decides Everything
Underneath the noise of investment cycles and capital allocation sits one decisive metric: manufacturing yield on HBM4 memory chips. SK Hynix confirmed it began mass shipments of 12-high HBM4 modules in the second quarter, with the production ramp-up slated for the second half of 2026.
Should investors sell immediately? Or is it worth buying SK Hynix?
That's precisely where the competitive threat is building. Samsung Electronics, based in Suwon, claims its HBM4 yield has reached roughly 80 percent — matching SK Hynix's stability threshold and arriving four months ahead of schedule. Samsung also reports HBM4E yields above 70 percent in reliability testing. UBS projects that Samsung will capture a 41 percent share of the HBM market next year, edging out SK Hynix's expected 39 percent.
Should SK Hynix lose pricing power in the most profitable segment of the AI memory market, the record margins it just posted could erode quickly. The stakes are existential: whether the current correction is merely a breather after a massive rally or the beginning of a structural re-rating depends entirely on defending that technological lead.
Wall Street Splits on the Recovery
The analyst community is sharply divided on what comes next. Morgan Stanley's Sean Kim — the strategist who famously warned of "Memory, Winter Is Coming" in 2021 — declared the correction in memory chip stocks over in a report dated August 6. He reaffirmed a 2.6 million won price target while raising 2026 earnings estimates by 13 percent, pointing to slowing foreign selling as evidence: outflows have moderated from roughly $30 billion in June and $6.2 billion in July to $4.3 billion so far in August. Notably, he cut Samsung Electronics' earnings estimate by 10 percent while holding its target at 375,000 won.
The bull camp has been busy on the other side of the Atlantic as well. Cantor Fitzgerald initiated coverage on August 4 with an "Overweight" rating and a $300 price target, while Rosenblatt set a $320 target with a "Buy" that same day. Wedbush upgraded the stock to "Strong-Buy" on August 5. RBC Capital, Wolfe Research, Needham, Stifel, William Blair and UBS all launched coverage within days, with targets ranging from $200 to $240, predominantly at "Buy" or "Outperform."
Yet even the bulls are trimming expectations. Barclays cut its target from $330 to $300 on July 30, maintaining "Overweight" but acknowledging the post-earnings volatility warrants recalibration.
A Labor Dispute Adds Another Variable
The company faces a domestic headache that could complicate its production timeline. SK Hynix and its union have completed five rounds of negotiations without reaching an agreement on a plan to pay part of employee bonuses in shares. More than 3,500 workers — roughly ten percent of the workforce — are seeking to form a separate union. The dispute carries the risk of delaying the HBM4 ramp-up, which is already scheduled for the second half of this year.
For now, the shares are catching a bid — the stock traded at 1,430,000 won, up 0.56 percent, amid a broader tech rally in Seoul. Year-to-date gains still stand at 120.10 percent, a reminder of just how far the stock had run before the pullback. The path forward hinges on two concrete milestones: the expected — but unconfirmed — shareholder return announcement due by the end of August, and the actual production ramp of the 12-high HBM4 chips in the second half, which will test whether SK Hynix can deliver on its yield promises while fending off a resurgent rival from Suwon.
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